Tax Break For Married Couples Planned

It is believed the government are planning to introduce a tax break for married couples before the 2015 election.

The announcement comes after wide criticism of the chancellor's plan to axe child benefit for higher rate taxpayers from 2013.

However, the Prime Minister has stood by plans to scrap child benefit for high earners.

In a recent interview, David Cameron said he knew cutting the benefit for earners making more than £44,000 would not make him popular - however it was the "right thing to do".

He added it is fair to ask them to contribute to cutting the £155bn deficit.

However, Labour's Yvette Cooper has described the move as an "unfair attack on child benefit".

Yesterday, Chancellor George Osborne announced that from 2013 child benefit is to be axed for high rate taxpayers.

In an interview with the BBC, Mr Osborne said it was a "big decision" but "absolutely necessary."

During a time of severe financial pressure, the move would save the government around £1bn a year.

Mr Osborne also revealed the total state benefits one family can claim in future will be capped at about £26,000.

This will mean that no family on welfare will be better off than one earning an average income from work, the chancellor said.

The changes will apply to around 1.2 million families.

Those affected are parents who earn around £44,000 individually, roughly 40% tax level or above.

However single parents and couples on modest incomes would be further penalised.

Each year, child benefit is paid out to 7.7 million families with children, costing around £12bn per year.

Mr Osborne said: "It's very hard to justify taxing people on much lower incomes in order to pay the child benefit to some of the better off in our society."

He said the cut would hit homes with a single or two high earners but families with two parents on separate incomes up to £44,000 - would keep the benefit.

The chancellor describes his plan as "the most straightforward" option - which would avoid across the board means testing.

Mr Cameron told the BBC that while people on £44,000 were not rich - they were "a lot better off" than those trying to raise a family on £25,000 a year adding that the cut - "makes sense".

"In the spending round we're having to make difficult decisions. This is £1bn I don't have to take off the education budget.

"I want to make sure in Britain we have real social mobility and life chances given to the poorest children in our country so they can go to the best schools and the best universities and we can have a truly mobile Britain.

"That does mean in a spending round you have to ask better off people to make a contribution so you can protect the most vulnerable and help them have a better life."

Accusing the previous Labour leadership of having "bankrupted the country", he said: "It is difficult. I wish I wasn't having to do this, but we have to deal with the problems in front of us."

Later, at the Conservative Party conference in Birmingham, Work and Pensions Secretary Iain Duncan Smith will give more details later on welfare reform.

(BMcN/GK)